23 June 2017

We reported on 12 May 2017 that Mr Justice Birss had given an important decision concerning FRAND undertakings. On 7 June 2017, Mr Justice Birss gave a follow-up decision dealing mainly with the FRAND licence agreed between the parties and the decision as to whether to grant Unwired Planet an injunction to restrain patent infringement by Huawei, along with some ancillary matters (damages, declaratory relief, costs and permission to appeal). While almost all of the detail of the licences referred to in the earlier decision had been redacted, the settled FRAND licence agreed between these parties is annexed to the judgment in full.

In his decision of 5 April 2017, Mr Justice Birss said that an implementer which refuses to take a licence on the FRAND terms has effectively chosen to have no licence and so if it has been found to infringe a valid patent then an injunction can be granted against it. However, an implementer who makes an unqualified commitment to take a licence on FRAND terms cannot be the subject of a final injunction to restrain patent infringement.

Up until that decision, Huawei had refused to take the licences, later found not to be FRAND, offered by Unwired Planet. After that decision Huawei offered undertakings to the effect that it would enter into the form of licence settled by the courts. Huawei submitted that the court should accept its undertakings and therefore refuse to grant an injunction to restrain patent infringement. Unwired Planet contended that a final injunction should be granted but accepted that it should be stayed pending appeal.

Mr Justice Birss refused the undertakings offered by Huawei on the ground that Huawei had refused to offer an unqualified undertaking before trial and before judgment and therefore forced Unwired Planet to go to court and vindicate its rights. Mr Justice Birss agreed to grant what he termed “a FRAND injunction” which would be stayed pending appeal. A FRAND injunction is an injunction to restrain infringement of the relevant patents which includes a proviso that it will cease to have effect if the defendant enters into the FRAND licence. Further, the FRAND injunction permits either party to return to court in future to address the position at the expiry of the FRAND licence, if the FRAND licence is for a shorter period than the lifetime of the relevant patents, or the FRAND licence ceases to have effect for any other reason, because the court should not prejudge at this stage what should happen if or when the FRAND licence ceases to have effect.

Huawei was granted permission to appeal on the global licensing issue, hard edged non-discrimination and on Huawei v ZTE, while Unwired Planet was granted leave to appeal on the blended global benchmark issue (see our report on the main judgment for more detail).